NeighborWorks® ORGANIZATIONS

COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG)
FY 1991-1994

The overall impact of NeighborWorks® organizations' programmatic activities in FY 1994 resulted in $252.6 million investment in America's distressed neighborhoods. Through these efforts, 7,296 housing units were either rehabilitated, newly constructed or promoted to low-income home ownership. Included were 3,060 household who become first-time homeowners. Additionally, 7,252 housing units were provided with home repair services. Home repair services involve minor repairs, usually at less than $2,000 per unit cost. Numerous other community building services such as neighborhood clean-up, safety, neighborhood marketing, community leadership training, lead poisoning prevention, youth employment projects were provided to thousands of families.

This report is an analysis of city (CDBG) funds utilized by NeighborWorksR organizations in the last four years. After a brief discussion of data source, the overall programmatic impact and specific service activities of the network organizations are discussed. Following this, sources of contributions to NeighborWorks® organizations' operating expenses are described.

Data Analysis

As part of Neighborhood Reinvestment's program monitoring functions, two sets of data are systematically collected from all NeighborWorksR organizations. The quarterly survey involves NeighborWorks® organization programmatic activities including the source and amount of investment by neighborhood revitalization strategy, and affordable housing unit production. The annual survey involves data concerning NeighborWorks® organization organizational, staff, and neighborhood attributes. Data from the quarterly and annual surveys will be used for the first and second parts of this analysis, respectively.

With the exception of HOME grants, Neighborhood Reinvestment's data collection forms do not specify the types of funds; rather, they are based on the sources of funding. Given the multiplicity of funds provided by a funding agency, for instance state funds, collecting data on individual funds would require significantly more staff time and resources. Nevertheless, based on our field experience, we can assume that more than 90 percent of the funds given to NeighborWorks® organizations by their home cities come from CDBG allocations. The corresponding figure for state/county funds is estimated at 20 percent.

While NeighborWorks® organizations submit their own data, there are several quality control procedures which ensure the data's reliability and validity. These include a diligent review of the submitted data, automated quality control of the data, and dissemination of reported output from individual NeighborWorks organization to Neighborhood Reinvestment's Program Review and Field Operations departments for data verification. The rate of return for the surveys is above 95 percent.

City Funds (CDBG): NeighborWorks® Organizations' Sources of
Programmatic Investment

Table I shows the amount of NeighborWorksR organization programmatic investment by funding source during the last four years. In FY 1991, NeighborWorksR organizations generated investment amounted to $146.5 million. The corresponding figures for 1992, 1993 and 1994 shows increases to $198.1, $210.3 and $252.6 million, respectively. The total amount of funds contributed to NeighborWorksR organization programmatic services by city funds increased from $37.6 million (26 percent of the total) in 1991 to $43.4 million (22 percent of the total) in 1992. The corresponding figure in 1993 was $62.2 million (30 percent of the total). During 1994, however, city funds declined to $49.6 million, representing 20 percent of the total reinvestment generated by NeighborWorks organizations.

Contributions to NeighborWorksR organization programmatic services by state/county funds amounted to $16.7 million in 1991, $34.9 million in 1992, $12.9 million in 1993, and $18.6 million in 1994. These figures represented 11 percent of the total investment in 1991, 18 percent in 1992, 6 percent in 1993, and 7 percent in 1994.

Approximately two-thirds of the total NeighborWorks® organization's programmatic investment during 1991 through 1993 was mobilized from other partnership sources (i.e., private sectors). The contributions generated by NeighborWorks organizations from these private sources increased to 72 percent of the total $254.6 million investment in 1994.

The significant decrease in the percentage of contributions made by city/state funds in the last four years reflects NeighborWorks® organization's successful attempt in partnership building efforts. It also highlights their highly effective community revitalization strategy in utilizing market dynamics and private sector resources. In 1994, for every $1 of city/state contribution to NeighborWorks® organizations' programmatic services an additional $3 was leveraged from private sector partnership sources. However, city funds still play an important role in NeighborWorksR organization's efforts to revitalize America's distressed neighborhoods.

City Funds (CDBG): NeighborWorks® Organizations' Specific
Programmatic Services

Table II shows the specific types of NeighborWorksR organization programmatic services related to city funds. The category of "neighborhood capital improvement" represents investment in neighborhood infrastructure (e.g., neighborhood streets, parks, bridges, etc.). To focus on NeighborWorksR impact pertaining to city funding, we have excluded capital improvement investment from the percentage distribution of the funds.

In 1991 and 1992, the largest portion of city funds, 56 percent ($11.2 million) and 49 percent ($14.4 million), was allocated to NeighborWorks® organization's rehabilitation of single-family owner-occupied units. During the same period, allocations to home ownership promotion services constituted 25 percent ($4.9 million) and 21 percent ($6.1 million) of the total programmatic city funds. In 1993 and 1994, however, funding for home ownership promotion services increased dramatically to 41 percent ($15.6 million) and 56 percent ($22.8 million) of the total contributions. Allocations to single-family rehabilitation services in 1993 and 1994 decreased significantly to 26 percent.

City funding for special projects shows a significant increase from less than $2 million in 1991-92 to $4.4 million in 1993. In 1994, however, the share of special projects declined to $2.2 million. These projects are targeted at specific populations, such as the elderly, the homeless, youth, and renters with a home-purchase option. City funds directed to Mutual Housing Associations increased from $1.3 million in 1991 to $4.9 million in 1993, but declined to $2.3 million in 1994.

In terms of NeighborWorks® organization's specific programmatic services, home ownership promotion has become the main source of utilizing city (CDBG) funds in the last two years. Home ownership promotion is the most capital- and staff-intensive service provided by NeighborWorksR organizations. Based on our years of experience in serving the nation's low-income communities, we believe that it plays a crucial role in stabilizing America's distressed neighborhoods and in bringing low-income families into the mainstream American life. Home ownership promotion is also one of the most effective ways to use market resources in building a partnership with the private sector.